Del. Auditor McGuiness sentenced to probation, fined

Editor’s note: This story has been updated to reflect a change in resignation date and the naming of an interim auditor. 

State Auditor Kathy McGuiness has resigned from office following sentencing for misdemeanor crimes. 

A Delaware Superior Court judge sentenced McGuiness to one year of probation on official misconduct and conflict of interest charges, 500 hours of community service and a $10,000 fine. In addition, she is to have no contact with trial witnesses. 

During the Oct. 19 sentencing in Dover, defense attorney Steven Wood said McGuiness would resign effective Friday, Nov. 4; however, McGuiness later revised her resignation letter to take effect by the end of day Oct. 19.

Emily David, spokeswoman for Gov. John Carney, said in a statement, “The governor received a letter from the auditor ... and has accepted her resignation effective 4:30 p.m., Oct. 19. There’s important work that has to be done in the auditor’s office over the next couple of months including the Annual Comprehensive Financial Report.”

On Oct. 20, Carney appointed Dennis Greenhouse to serve as auditor until a new auditor takes office in January.

At the sentencing hearing, Judge William C. Carpenter said McGuiness exercised a lack of good judgment and common sense after the citizens of Delaware put their trust in her to hold the job of auditor.

Speaking on her own behalf, McGuiness said she fell short of expectations and was deeply remorseful of her actions, fighting back tears as she spoke. 

McGuiness was found guilty in July of three misdemeanors including official misconduct, conflict of interest and structuring. She was found not guilty on charges of felony theft and intimidation. The structuring conviction was overturned in August, but Carpenter denied McGuiness’ motion for a new trial. 

The Attorney General’s Office recommended a 30-day prison stint for McGuiness, stating in a sentencing memo that she has shown a lack of remorse for her actions and has continued to engage in unethical conduct. 

At the Oct. 19 sentencing, Deputy Attorney General Mark Denney said, “Our position is when it comes to a gross betrayal of the public trust, the state of Delaware believes incarceration is warranted.”

Wood used his argument to ask the court to give McGuiness a $1,000 fine with no probation, saying probation would serve no purpose and a fine would hold in place McGuiness’ right to appeal her conviction to Delaware Supreme Court. 

The misconduct and conflict of interest charges stem from McGuiness hiring her daughter and her friends at a time when other employees left because their hours had been cut. At trial, prosecutors alleged that McGuiness’ daughter’s paychecks were deposited into a joint bank account held by McGuiness and her daughter. On the stand, her daughter denied that she ever gave her mother money, and Wood submitted evidence that the bank account was a starter account commonly opened by parents for their children.

Wood said McGuiness did not know she was violating any laws when she hired her daughter. He said the state’s sentencing recommendation was grossly disproportionate and unjust. 

Despite her conviction in July, McGuiness ran for re-election in the Democratic primary, but she was soundly defeated by challenger Lydia York by a 35,881 to 14,640 margin. The new auditor will be determined in the Tuesday, Nov. 8 general election, where York will take on Republican challenger Janice Lorrah.

Following the sentencing, Wood and McGuiness spoke to reporters outside the courthouse. 

“There have been a lot of claims made by the state from the beginning of this prosecution about what Kathy McGuiness did or didn’t do, and every one of those claims has been proved to be false either by the jury’s verdict or Judge Carpenter’s decisions,” Wood said. “She was convicted of hiring her daughter. That’s all. To recommend jail time for someone convicted of the offense of hiring her daughter as a part-time college intern is unconscionable.”

He said Carpenter’s sentence was fair and just, and that McGuiness plans to appeal the verdict to Delaware Superior Court. 

McGuiness briefly discussed her resignation but did not comment further on her case.